Council leaders across UK believe Brexit will hurt local economies

The survey by the New Local Government Network found only 12% of 185 respondents believed Brexit would have a positive effect on their economies. Photograph: Stefan Rousseau/PA

Council leaders across the UK believe Brexit will damage their local economies, putting them under greater pressure to push up council taxes and cut yet more services.

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A nationwide survey of all council leaders and local authority chief executives in county, district, unitary and metropolitan and London borough councils found 61% believed Brexit would have a negative or very negative impact on their regions.

The survey by the New Local Government Network (NLGN) found only 12% of 185 respondents believed it would have a positive effect on their economies, while 26% felt the impact of leaving the EU would be neutral.

It is also uncovered profound dissatisfaction with the level of support and engagement that councils are receiving from central government over Brexit. Only 4% said they were receiving adequate support, while 68% thought it was insufficient.

The fact that many of the respondents were from Tory-led councils as well as Labour and Liberal Democrat-controlled ones, underlines how worries about Brexit – including the loss of £8.4bn of EU regional aid – unites many in control of local government whatever their political persuasion. Conservatives run 71% of all district councils. The response rate to the survey from leaders of all districts to the NLGN survey was 57%.

Adam Lent, director of the NLGN, said: “Whatever you think of Brexit, it has to be a concern that the most senior local government figures charged with keeping their local economies buoyant feel so pessimistic.

“The government needs to move very rapidly to address this striking loss of confidence by engaging much more closely with council leaders and chief executives as they prepare for the UK’s withdrawal from the EU.”

Separate research by the NLGN has shown rising concern among local businesses and in local public services about potential future shortages of workers as a result of changes to immigration rules. There are also worries about the economic effect of a fall in student numbers in universities and colleges.

The survey highlighted differences of opinion across the UK. Chief executives and leaders in the south-east, where more people voted to remain than in much of the north, were the least pessimistic about the effects of the UK’s withdrawal, with 48% believing Brexit would have a negative or very negative impact on their local economy. The north-east, however, where theleave vote was above 60% in many areas, proved the most pessimistic with 100% of council chiefs expecting a very negative or negative outcome.

While the Conservatives’ 2017 election manifesto included a pledge to create a UK “shared prosperity fund” to replace EU regional aid, little detailed information has been given about how this funding will be allocated.

Leaders of the Local Government Association (LGA) have also called for “urgent clarity” over how ministers intend to replace current European Union structural funds. The LGA said before Christmas that councils were becoming “increasingly concerned”.

Councils have suffered cuts to their budgets in excess of 40% since the Tories launched their austerity programme in 2010, leading to savage reductions to a range of services from social care, to libraries and leisure facilities.

Lent added: “Councils continue to face unprecedented financial pressures and growing uncertainty regarding their future funding. Weaker local economies would lead to a lower ability to raise revenue through business rates – something which local services will increasingly come to rely upon.

“This means there is a real risk that local taxpayers will be left picking up the bill – either by significant raises to council tax, or the reduction in the services that councils can deliver.”